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Chapter 191
RBOB Gasoline Futures
191100.
SCOPE OF CHAPTER
This chapter is limited in application to RBOB Gasoline futures. The procedures for trading,
clearing, delivery and settlement not specifically covered herein or in Chapter 7 shall be governed
by the general rules of the Exchange.
The provisions of these rules shall apply to all Reformulated Gasoline Blendstock for blending with
10% Denatured Fuel Ethanol (92% Purity) bought or sold for future delivery on the Exchange with
delivery in New York Harbor.
The term "RBOB" shall mean Reformulated Regular Gasoline Blendstock for blending with 10%
Denatured Fuel Ethanol (92% Purity) as defined in the American Society for Testing Materials
(“ASTM”) D-4806 as listed by the Colonial Pipeline Company (“Colonial Pipeline”) for Fungible F
grade and properly designated for sale in New York and New Jersey in accordance with U.S.
Environmental Protection Agency (“EPA”) regulations.
The terms “seller” and “buyer” shall mean the seller of the physical product and the buyer of the
physical product, respectively.
The term "contract value" shall mean the amount equal to the settlement price on the last day of
trading in a futures contract times 42,000 times the number of contracts to be delivered.
For purposes of these rules, unless otherwise specified, times referred to herein shall refer to and
indicate New York time.
191101.
CONTRACT SPECIFICATIONS
The RBOB delivered shall be a hydrocarbon oil free from alkali, mineral acid, grit, fibrous or other
foreign matter, meeting the specifications as are in effect for downstream parties at the time of
delivery meeting the requirements of Colonial Pipeline Company (Atlanta, Georgia) for:
Fungible F Grade, Reformulated Regular Gasoline Blendstock (RBOB) for blending with 10%
Denatured Fuel Ethanol (92% Purity) as defined in ASTM D-4806 as listed by the Colonial Pipeline
as being properly designated for sale in New York and New Jersey in accordance with EPA
regulations; provided, however, and notwithstanding anything to the contrary in the Colonial
Pipeline specifications, the specifications set forth in Sections 101.1. through 101.5. below shall
apply for Reid Vapor Pressure, Oxygenation, Corrosion, Distillation, and EPA Reformulated
Gasoline requirements:
1. Reid Vapor Pressure: RBOB delivered pursuant to this contract shall have Reid Vapor
Pressure no greater than the following maximum levels after blending with denatured fuel
ethanol:
MONTH
P.S.I.
January
15.0
February
15.0
March
13.5
April
9.0
May
9.0
June
9.0
July
9.0
August
9.0
September 1-15
9.0
September 16-30
13.5
October
13.5
November
15.0
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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December
2.
3.
4.
5.
191102.
15.0
Provided that, deliveries on the September contract originally nominated for delivery on or
before September 15 shall not exceed 9.0 p.s.i., regardless of the time of actual delivery.
Oxygenation: RBOB shall not contain oxygenates, such as ethers or alcohols. The de minimis
limit of MTBE, ETBE, and TAME allowed is 0.3% by volume maximum.
Corrosion: RBOB shall comply with the Colonial Pipeline specifications for Copper and Silver
Corrosion under ASTM D-130 and ASTM D-4814. The NACE Corrosion test is not required.
Distillation: RBOB shall comply with the Colonial Pipeline distillation requirements, except for
the T50 minimum requirement during the winter season when the Non-VOC controlled RBOB
shall meet the T50 minimum requirement (for 50% by volume Evaporation) at 150 degrees
Fahrenheit, as required by Buckeye Pipeline Grade 542. Deliveries against the March contract
month shall meet the Buckeye Pipeline Grade 542 requirements for the minimum T50
distillation standard and the minimum temperature for meeting the Vapor/Liquid Ratio (V/L) in
effect for non-VOC controlled RBOB.
(a) RBOB deliveries shall comply with EPA requirements for RBOB designated gasoline at all
times, including the minimum and maximum standards set forth in 40 C.F.R. Part 80 as are in
effect for downstream parties at the time and place of delivery, and shall be adjusted by the
amount of any increase or decrease in such standards as required by EPA for RBOB sold and
distributed for consumption in the New York Harbor area. RBOB deliveries shall comply with
State and Federal requirements for oxygen content for RBOB sold for consumption as are in
effect at the time and place of delivery. In the event that EPA issues a temporary waiver which
impacts fuel standards at Exchange-approved terminals in New York Harbor, the Exchange, in
its sole discretion, will review the provisions of the waiver on a case-by-case basis to
determine whether to modify the existing delivery requirements for RBOB-designated gasoline
to comply with such waiver.
(b) RBOB shall be designated as VOC-Controlled in accordance with EPA regulations during
the period April 1 through September 15, including any deliveries on the September contract
originally nominated for delivery on or before September 15, regardless of the date of actual
delivery.
(c)(i) All tests shall be performed in accordance with EPA regulations.
(ii) Enforcement tolerances, as permitted by EPA for downstream parties, shall apply to all
specifications governed by EPA regulations. Product delivered in conformance with such
specifications, including enforcement tolerances, may not be rejected by the buyer as
nonconforming to the specifications.
(iii) ASTM refers to the American Society for Testing Materials.
(iv) API. refers to the American Petroleum Institute.
TRADING SPECIFICATIONS
Trading in RBOB Gasoline futures is regularly conducted in all calendar months. The number of
months open for trading at a given time shall be determined by the Exchange.
191102.A. Trading Schedule
The hours for trading shall be determined by the Exchange.
191102.B. Trading Unit
The contract unit to be delivered by the seller shall be 42,000 U.S. gallons (1,000 U.S. barrels).
Except for a delivery made by book transfer or stock transfer in accordance with Section 105, a
loading tolerance of two percent (2%) above or below (1020 U.S. barrels or 980 U.S. barrels) the
contract unit is permitted. The volume delivered shall be determined at 60 degrees Fahrenheit
using ASTM Standard D-1250, Table 6 B.
191102.C. Price Increments
The minimum price fluctuation shall be $.0001 per gallon. Prices shall be quoted in dollars and
cents per gallon.
191102.D. Special Price Fluctuation Limits
At the commencement of each trading day, the contract shall be subject to special fluctuation limits
as set forth in Rule 589 and in the Special Price Fluctuation Limits Table in the Interpretations &
Special Notices Section of Chapter 5
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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191102.E. Position Limits, Exemptions, Position Accountability and Reportable Levels
The applicable position limits and/or accountability levels, in addition to the reportable levels, are
set forth in the Position Limit, Position Accountability and Reportable Level Table in the
Interpretations & Special Notices Section of Chapter 5.
A Person seeking an exemption from position limits for bona fide commercial purposes shall apply
to the Market Regulation Department on forms provided by the Exchange, and the Market
Regulation Department may grant qualified exemptions in its sole discretion.
Refer to Rule 559 for requirements concerning the aggregation of positions and allowable
exemptions from the specified position limits.
191102.F. Termination of Trading
No trades in RBOB Gasoline futures in the expiring contract month shall be made after the last
business day of the month preceding the delivery month for such expiring contract. Any contracts
remaining open after the last day of trading must be either:
(a) Settled by delivery which shall begin no earlier than the day after the fifth business day of the
delivery month or later than the last day prior to the last business day of the delivery month
and shall be completed no later than the last business day of the delivery month; or
(b) Liquidated by means of a bona fide Exchange for Related Position (“EFRP”) pursuant to Rule
538. An EFRP is permitted in an expired futures contract at any time before 2:00 p.m. on the
first business day following termination of trading in the expired futures contract. An EFRP
which establishes a futures position for either the buyer or the seller in an expired futures
contract shall not be permitted following the termination of trading of an expired futures
contract.
191103.
PRODUCT IN TANK
The seller shall have a quantity and quality of product in tank at one or more eligible delivery
facilities in accordance with the inspection requirements under Section 104 prior to the first day of
the consecutive five-day period for initiation of delivery identified by the buyer in the Initial Delivery
Instructions. The obligation to have product in tank, as prescribed in this rule, shall constitute a
"material act with respect to a delivery obligation".
191104.
INSPECTION
1.
2.
3.
4.
The buyer’s clearing member shall notify the seller’s clearing member in the Initial Delivery
Instructions that a grade and quality or quantity inspection is requested. The seller shall initiate
inspection of the product to be delivered 24 hours prior to the nominated time and date
specified in the delivery instructions. The buyer’s clearing member may request the tests for
any or all grade and quality specifications for the stated product in accordance with Section
101. The buyer’s clearing member may request a quantity inspection for all deliveries. The
buyer’s clearing member shall require a quantity inspection for delivery by barge, tanker or
inter-facility transfer (pump-over). If the buyer’s clearing member does not request a quantity
inspection, the seller’s clearing member may request such inspection.
If a buyer’s clearing member requests grade and quality or quantity inspection, or if a seller’s
clearing member requests a quantity inspection, the inspection company listed in the Initial
Delivery Instructions shall perform the inspection, unless an alternate inspection company is
appointed pursuant to Section 106.A.3.
If the product meets grade and quality specifications, the buyer and seller shall share equally
in the cost of inspection. If the product does not meet grade and quality specifications, the
seller shall pay the cost of inspection. The cost of verifying the quantity of product transferred
shall be shared equally by buyer and seller.
If the product does not meet grade and quality specifications, or if product is added to the
tendered tank(s) after the inspection is conducted, the seller, at its own expense shall initiate a
second inspection, performed by the same inspection company as the initial inspection. Seller
shall furnish the results of the second inspection to the buyer no later than the nominated time
and date of pickup. If the product does not meet grade and quality specifications in the second
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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5.
6.
7.
191105.
inspection, within one business day of receipt of the report by the Exchange, the Exchange
shall review the delivery if necessary, pursuant to the procedures set forth in Chapter 7.
The inspection company shall not be affiliated with the parties to the delivery. The inspection
company must be capable of performing the quantity or quality tests requested by the buyer’s
clearing member or seller’s clearing member in such a manner so as to assure that the product
delivered conforms with these rules. The inspection company shall determine the quantity or
quality of product transferred by using the prevailing practices of the facility transferring the
product in effect at the time of delivery.
Upon request from the Exchange, the buyer’s clearing member and the seller’s clearing
member shall deliver to the Exchange a copy of all reports of the inspection company when
they are received.
The buyer, at its own discretion and expense, may request in the Initial Delivery Instructions
that the seller perform an additional inspection, called pre-inspection, for quality and quantity
on the total amount to be delivered in the five-day delivery period specified in the Initial
Delivery Instructions. The seller shall initiate pre-inspection 24 hours prior to the first day of the
consecutive five-day period for delivery. Pre-inspection shall be performed by the same
inspection company as indicated in the Initial Delivery Instructions. If the product does not
meet grade and quality specifications in the pre-inspection, the seller, at its own expense, shall
initiate a second pre-inspection, performed by the same inspection company as the initial preinspection. Seller shall furnish the results of the second pre-inspection to the buyer prior to the
first day of the consecutive five-day delivery period.
DELIVERY
Delivery shall be made free-on-board (“F.O.B.”) sellers ex-shore facility in New York Harbor with all
duties, entitlements, taxes, fees and other charges imposed prior to, or as a result of, delivery paid
by the seller. Delivery shall be made in accordance with applicable Federal, State and local laws.
Delivery shall comply with all State laws related to oxygen content. Buyer shall reimburse seller for
any gasoline tax as had been or will be paid by the seller. At buyer’s option, such delivery shall be
made by any of the following methods:
1. By delivery into buyer’s barge;
2. By delivery into buyer’s tanker, if buyer can take delivery in such manner at the facility used by
seller;
2. By delivery into buyer’s pipeline, if buyer can take delivery in such manner at the facility used
by seller;
3. By stock transfer of title to the buyer, if the facility used by seller allows such transfer;
4. By book transfer if the seller agrees to such transfer;
5. By intra-facility transfer ("pump-over"), if the facility used by seller allows such transfer; or
6. By inter-facility transfer ("pump-over"), if both facilities used by seller and buyer allow such
transfer.
RBOB Designation: At the time of the delivery, the seller shall provide the buyer, with a copy to the
seller’s clearing member, a Product Transfer Document prepared in accordance with EPA
regulations.
For purposes of these rules, any seller delivering an aggregate of twenty-five (25) contracts or less
in a delivery month, shall deliver all such contracts into the same facility.
For the purpose of these rules, New York Harbor shall extend from the East River west of Hunts
Point; Gowanus Bay west of the Hamilton Avenue Bridge; the Hudson River south of George
Washington Bridge; the Upper Bay; the Narrows; the Lower Bay west of Norton Point; the Newark
Bay; the Hackensack River south of the Witt-Penn Bridge; the Passaic River south of the Pulaski
Skyway Bridge; the Kill Van Kull; the Arthur Kill and the Raritan River east of the Garden State
Parkway Bridge.
191106.
DELIVERY PROCEDURES
191106.A. Responsibilities of Clearing Members Having Open Long Positions
1.
Notice of Intention to Accept
Exchange clearing members having open long positions shall provide the Clearing House with
a Notice of Intention to Accept delivery by 3:00 p.m. on the first business day of the delivery
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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month. The Notice of Intention to Accept must be in the form prescribed by the Exchange, and
must be properly completed and indicate the name(s) of the buyer(s), the number of contracts
to be accepted, the names of three inspection companies and any additional information as
may be required by the Exchange. The buyer may, at its option, request a preferred delivery
site; such request shall not be binding upon the seller.
2. Initial Delivery Instructions
Upon receipt from the Exchange of a Notice of Intention to Deliver, but no later than 4:30 p.m.
on a business day no later than the fourth business day of the delivery month, the buyer’s
clearing member shall provide the seller’s clearing member identified in such Notice of
Intention to Deliver and the Exchange with properly completed Initial Delivery Instructions in
the form prescribed by the Exchange. Such Initial Delivery Instructions must include the
following information:
a. Name of seller’s clearing member;
b. Tender number;
c. Name and location of delivery facility specified in the Notice of Intention to Deliver;
d. Number of contracts;
e. Method of delivery (which must conform to the normal capabilities of the facility named in
the Notice of Intention to Deliver with respect to the manner and time of delivery and the
quantity to be delivered);
f. A consecutive five-day period for initiation of delivery;
g. Name of the designated inspection company, if so required;
h. Confirmation of verification of delivery method and inspection company in accordance with
Section 106.A.3.; and,
i. Any additional information as may be required by the Exchange.
3. Verification of Delivery Method and Inspection Company
Prior to providing the seller’s clearing member and the Exchange with Initial Delivery
Instructions, the buyer shall verify with and confirm in writing to the seller that the method of
delivery specified conforms to the normal capabilities of the seller’s delivery facility with respect
to the manner of delivery and the quantity to be delivered and that the inspection company
specified has been accepted by the seller. Such verification shall be confirmed in the Initial
Delivery Instructions. If the buyer and seller fail to agree on one of the three inspection
companies specified in the Notice of Intention to Accept, the Exchange shall appoint an
inspection company which shall not be either of the three inspection companies listed in the
Notice of Intention to Accept. Initial Delivery Instructions may not be amended after they have
been provided to the seller’s clearing member and the Exchange.
4. Delivery Instructions
The buyer’s clearing member may provide the seller’s clearing member with Delivery
Instructions on any business day prior to 10:30 a.m. Delivery Instructions provided after 10:30
a.m. on any business day shall be deemed to have been provided on the following business
day. A buyer’s clearing member may not provide the seller’s clearing member with Delivery
Instructions on the day on which Initial Delivery Instructions are provided to the seller’s clearing
member pursuant to Section 106.A.2. above. The buyer's clearing member’s Delivery
Instructions for a delivery which is to occur during the consecutive five-day period the final day
of which is the day prior to the last business day of the delivery month shall not designate such
final day of the five-day period for the initiation of the delivery.
The buyer’s clearing member shall provide the seller’s clearing member and the Exchange
with properly completed Delivery Instructions in the form prescribed by the Exchange no later
than two calendar days prior to the time of the proposed delivery, or such earlier business day
as is necessary to ensure that the day on which Delivery Instructions are provided is followed
by a period that includes at least one business day and two subsequent calendar days ending
on the day prior to the last business day of the delivery month. Except as provided in Section
106.A.6. below, Delivery Instructions must conform to the Initial Delivery Instructions provided
by the buyer’s clearing member to the seller’s clearing member and the Exchange.
5. Form of Delivery Instructions
The Delivery Instructions must be in the form prescribed by the Exchange, and must be
properly completed and contain the following information:
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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a.
b.
c.
d.
e.
Name of seller’s clearing member;
Tender number;
Name and location of delivery facility specified in the Notice of Intention to Deliver;
Number of contracts;
Method of delivery (which must conform to the normal capabilities of the facility named in
the Notice of Intention to Deliver with respect to the manner and time of delivery and the
quantity to be delivered);
f. Name of proposed carrier (i.e., Barge or Pipeline), and the approximate size of the barge
or tanker, if any;
g. For interfacility transfers, name of receiving facility;
h. Date and approximate time for initiating delivery,
i. Name of inspection company, if so required; and
j. Any additional information as may be required by the Exchange.
6. Amendment to Initial Delivery Instructions or Delivery Instructions
Neither Initial Delivery Instructions nor Delivery Instructions may be amended after they have
been provided to the seller’s clearing member and the Exchange. However, upon mutual
consent of buyer’s clearing member and seller’s clearing member and upon written notice to
the Exchange, the buyer’s clearing member and the seller’s clearing member may change the
delivery facility named by the seller, the method of delivery named by the buyer, the five-day
period for the initiation of a delivery named by the buyer, or the specific delivery date and time
named by the buyer.
7. Notice of Clearance; Notice of Non-Clearance
If the buyer’s clearing member receives from the seller’s clearing member a Notice of NonClearance stating that the seller is unable to deliver in accordance with the Delivery
Instructions, the buyer’s clearing member shall provide the seller’s clearing member and the
Exchange with Revised Delivery Instructions, no later than 10:30 a.m. on the third business
day following receipt of such Notice of Non-Clearance, or such earlier business day as is
necessary to ensure that the day on which Revised Delivery Instructions are provided is
followed by at least two subsequent calendar days ending on the day prior the last business
day of the delivery month. The Revised Delivery Instructions shall comply in all respects with
the provisions of Section 106.A.5. above and shall thereafter comply with the provisions of this
Section 106.A.7. as if such Revised Delivery Instructions were the original Delivery
Instructions; provided, however, that such Revised Delivery Instructions may designate for
delivery the final day of the consecutive five-day period immediately prior to the last business
day of the month. Such Revised Delivery Instructions shall specify a delivery date and time no
less than 24 hours before or after the delivery time specified in the original Delivery
Instructions (whether or not such date and time is within the five-day period specified in the
Initial Delivery Instructions), provided such date and time is prior to the last business day of the
delivery month and at least two calendar days subsequent to the date on which such Revised
Delivery Instructions are provided to the seller’s clearing member and the Exchange. Revised
Delivery Instructions provided after 10:30 a.m. on any day shall be deemed to have been
provided on the following business day. Except as provided in Section 106.A.6., Revised
Delivery Instructions may not be amended after they have been provided to the seller’s
clearing member and the Exchange.
8. Acceptance of Product
The buyer shall not begin to accept the product earlier than the day after the fifth business day
of the delivery month or later than the last day prior to the last business day of the delivery
month. The buyer shall complete receipt of product no later than the last business day of the
delivery month.
191106.B. Responsibilities of Clearing Members Having Open Short Positions
1.
Notice of Intention to Deliver
Exchange clearing members having open short positions shall provide the Clearing House with
a Notice of Intention to Deliver by 3:00 p.m. on the first business day of the delivery month.
The Notice of Intention to Deliver must be in the form prescribed by the Exchange and must be
properly completed, indicate the name of the seller(s), the name and location of the facility of
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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the seller(s) which will supply the product, the number of contracts and any additional
information as may be required by the Exchange.
2. Notice of Clearance; Notice of Non-Clearance
a. No later than 4:30 p.m. on the day on which the buyer’s clearing member provides the
seller’s clearing member Delivery Instructions, the seller’s clearing member shall provide
the buyer’s clearing member and the Exchange with a completed Notice of Clearance in
the form prescribed by the Exchange. The Notice of Clearance must indicate that the
seller is prepared to make delivery in accordance with the provisions of the buyer’s
clearing member’s Delivery Instructions.
b. (i) In the event that the seller is unable to make delivery in accordance with the buyer’s
Delivery Instructions because of a good faith inability to receive clearance from the facility,
the seller’s clearing member shall, no later than 4:30 p.m. on the day on which the buyer’s
clearing member provides the seller’s clearing member and the Exchange with Delivery
Instructions, provide to the buyer’s clearing member and the Exchange with a Notice of
Non-Clearance. The Notice of Non-Clearance must state the reasons for such inability to
deliver. The seller’s clearing member may, at its option, in the Notice of Non-Clearance,
suggest an alternate or preferred delivery site, date or time. In the event the facility
nominated by the seller’s clearing member asserts a minimum loading requirement for
barge delivery which is an amount greater than the quantity nominated by the buyer’s
clearing member for lifting, the seller’s clearing member may not issue a Notice of NonClearance to the buyer’s clearing member based solely upon such loading requirement.
However, in the event the facility's minimum loading requirement prevents delivery as
nominated by the buyer’s clearing member, the seller’s clearing member may unilaterally
and without the buyer’s clearing member’s consent, upon written notice to the buyer’s
clearing member and the Exchange, no later than 4:30 p.m. on the day on which the
buyer’s clearing member provides the seller’s clearing member and the Exchange with
Delivery Instructions, amend the name and location of the delivery facility set forth in the
Delivery Instructions to consummate delivery as otherwise provided in the Delivery
Instructions.
(ii) No later than 4:30 p.m. on the day on which the buyer’s clearing member provides the
seller’s clearing member and the Exchange with Revised Delivery Instructions, the seller’s
clearing member shall provide the buyer’s clearing member and the Exchange with a
Notice of Clearance in the form prescribed by the Exchange. The Notice of Clearance
must indicate that the seller is prepared to make delivery in accordance with the
provisions of the buyer’s clearing member’s Revised Delivery Instructions. Revised
Delivery Instructions provided after 10:30 a.m. on any day shall be deemed to have been
provided on the subsequent business day. In the event that the seller is unable to make
delivery in accordance with the buyer’s clearing member’s Revised Delivery Instructions
because of force majeure, the seller’s clearing member shall, no later than 4:30 p.m. on
the day on which the buyer’s clearing member provides the seller’s clearing member with
Revised Delivery Instructions, provide the buyer’s clearing member and the Exchange
with a Notice of Non-Clearance. The Notice of Non-Clearance must state the reasons for
such inability to make delivery.
191106.C. Final Settlement Price
The final settlement price shall be the basis for delivery.
191106.D. Notice Day
The Clearing House shall allocate Notices of Intention to Deliver and Notices of Intention to Accept
by matching size of positions to the extent possible. On the morning of the next business day, the
Clearing House shall provide copies of the notices to the respective clearing members. The day on
which the notices are provided to the clearing members shall be referred to as the Notice Day. The
Notice Day shall be the second business day of the delivery month.
191106.E. Non-Transferable
The clearing member who receives a Notice of Intention to Deliver or a Notice of Intention to
Accept from the Clearing House shall be deemed to have agreed to accept or deliver product.
Notices of Intention to Deliver and Notices of Intention to Accept are not transferable.
191106.F. Delivery Day and Payment
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
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1.
2.
3.
191107.
Shipment will commence when product passes the buyer's cargo intake flange, tank or pipeline
connection; at such time the buyer shall bear the risk of loss.
The buyer’s clearing member shall pay the seller’s clearing member by federal funds money
wire by 12:00 p.m. on the business day following the receipt of the product, or by 12:00 p.m.
on the last business day of the delivery month, whichever is earlier. The amount of payment
shall be based on volume delivered as determined in accordance with Section 102. Should the
inspector, appointed under Section 104, be unable to supply quantitative results prior to the
time established herein for payment of the product, a pro-forma payment based on 42,000
U.S. gallons per contract shall be made. Payment adjustments based on actual quantity
delivered shall be completed by 12:00 p.m, on the first business day after receipt of inspector's
report but no later than the third business day after completion of delivery of physical product.
(a) If the buyer requires multiple delivery dates, multiple payment shall be required for each
portion of product delivered.
(b) The seller’s clearing member, upon receipt of payment, shall provide the buyer’s clearing
member with a bill of lading or other quantitative certificate and any other appropriate
documents necessary to transfer ownership of the product to the buyer’s clearing member.
In the event that the seller’s clearing member receives notification that payment has not been
received, the seller’s clearing member shall advise the Exchange in writing by 5:00 p.m. on the
business day on which payment is due. On the following business day, unless the buyer or the
buyer’s clearing member has advised the Exchange in writing that the seller failed to deliver,
the Exchange shall liquidate the margins held and, when the liquidation is complete, shall pay
the seller’s clearing member which shall pay its seller. If the buyer or the buyer’s clearing
member has advised the Exchange in writing that the seller failed to deliver, the matter shall be
deemed a failure to deliver pursuant to Rule 714.
The day on which the buyer receives the product shall be referred to as the Delivery Day.
SHIPMENT
The seller’s delivery facility must be capable of making delivery by barge.
The seller’s ex-shore facility must have a minimum draft of 20 feet at mean low water and a
minimum access draft of 20 feet at mean low water. The seller must supply the product as soon as
the barge or tanker reports readiness to load; alternatively, if delivery is to be made on shore, the
seller must supply the product as soon as the buyer reports that the transfer facility is ready to
accept the product.
The buyer’s barge or tanker must be safely afloat at all times.
The seller shall pay all applicable demurrage charges if the shore facility is unable to deliver the
product at a rate sufficient to meet normal requirements for loading a barge or tanker or is unable to
deliver ex-tank or pipeline at the normal rate for such delivery. The buyer shall pay all other
demurrage charges.
191108.
ALTERNATE DELIVERY PROCEDURES
A seller and buyer matched by the Exchange under Section 106.D. may agree to make and take
delivery under terms or conditions which differ from the terms and conditions prescribed by this
Chapter. In such a case, clearing members shall execute an Alternative Notice of Intention to
Deliver on the form prescribed by the Exchange and shall deliver a completed and executed copy
of such notice to the Exchange. The delivery of an executed Alternative Notice of Intention to
Deliver to the Exchange shall release the clearing members and the Exchange from their
respective obligations under rules of this Chapter and any other rules regarding physical delivery.
In executing such notice, clearing members shall indemnify the Exchange against any liability, cost
or expense the Exchange may incur for any reason as a result of the execution, delivery, or
performance of such contracts or such agreement, or any breach thereof or default thereunder.
Upon receipt of an executed Alternative Notice of Intention to Deliver, the Exchange will return to
the clearing members all margin monies held for the account of each with respect to the contracts
involved.
191109.
VALIDITY OF DOCUMENTS
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
Page 8 of 10
The Exchange makes no representation respecting the authenticity, validity or accuracy of any
inspection certificate, Notice of Intention to Deliver, Notice of Intention to Accept, bill of lading,
check or any document or instrument delivered pursuant to these rules.
191110
LATE PERFORMANCE, FAILURE TO PERFORM AND FAILURE TO MAKE
PAYMENT
191110.A. Definitions
The term "late performance" shall mean the failure of a buyer’s clearing member or a seller’s
clearing member to complete a material act with respect to a delivery obligation imposed by, and
within the time period established in, the rules of this Chapter. Late performance may not exceed
the lesser of five continuous business days or eight consecutive calendar days.
The term "failure to perform" shall mean the failure of a buyer’s clearing member or a seller’s
clearing member to complete a material act with respect to a delivery obligation prior to the
expiration of the period allowed for the late performance of such act.
The term "Party" shall mean a buyer’s clearing member or seller’s clearing member.
The term "Other Party" shall mean the corresponding buyer’s clearing member when the seller’s
clearing member is late in performance or has failed to perform or has failed to make payment or
the corresponding seller’s clearing member when the buyer’s clearing member is late in
performance or has failed to perform or has failed to make payment.
The term "day of late performance" shall mean the twenty-four (24) hour period commencing twelve
hours after a Party was to have performed, provided however, with respect to the obligations of
buyers and sellers to submit documents to the Exchange pursuant to the rules of this Chapter, "day
of late performance" shall mean that the twenty-four hour period commencing immediately after the
time specified in the rules of this Chapter for the submission of a document. Each subsequent day
of late performance shall commence twenty-four hours after the beginning of the prior day of late
performance. When a Party is late in performance, the day on which the act is performed shall be
the day of late performance.
The term "failure to make payment" shall mean the failure of a buyer or a buyer’s clearing member
to make payment in accordance with Section 106.F.
191110.B. Responsibilities of Parties to the Delivery
1.
The Parties to a delivery shall make commercially reasonable efforts to perform their
respective delivery obligations at all times until a Party has failed to perform.
2. A Party which has failed to perform its obligations may no longer perform such obligations;
provided, however, that a buyer or a buyer’s clearing member which has failed to make a
payment shall make such payment.
3. In the event that a Party has failed to perform, the Other Party shall be responsible to provide
written notification to the Exchange in accordance with the Exchange rules and the rules of this
Chapter.
4. When a Party has failed to perform or when a buyer or a buyer’s clearing member has failed to
make payment, the Party through which the delivery is effected, shall be liable to the Other
Party for any damages awarded pursuant to Exchange arbitration and/or disciplinary
procedures.
191110.C. Surcharges for Late Performance
1.
Whenever a Party is found by the Exchange to be late in the performance of a delivery, the
Chief Regulatory Officer or his designee shall have the authority to impose surcharges in
accordance with Section 110.C.2.below.
2. Either one or both Parties shall be assessed a surcharge to be paid to the Exchange for each
day of late performance as described below. Such surcharge shall be cumulative for each day
of late performance.
– first day of late performance – up to 3% of contract value;
– second day of late performance – up to 3% of contract value;
– third day of late performance – up to 3% of contract value;
– fourth day of late performance – up to 3% of contract value;
– fifth day of late performance – up to 3% of contract value;
– sixth day of late performance – up to 3% of contract value;
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
Page 9 of 10
3.
4.
– seventh day of late performance – up to 4% of contract value;
– eighth day of late performance – up to 5% of contract value.
A Party shall have 15 days following receipt of the notice of a surcharge to present evidence to
the Market Regulation Department that the surcharge should be rescinded or reduced. Absent
the submission of such evidence within the designated time period, the surcharge shall be
deemed final and may not be appealed.
If the Chief Regulatory Officer or his designee determines that evidence submitted by a Party
pursuant to Section 110.C.3. is insufficient to support the requested rescission or reduction of
the surcharge, the Party may, within 10 days of the decision, file a written appeal with the
Market Regulation Department. A written appeal that fails to specify the grounds for the appeal
and the specific error or impropriety of the original decision shall be dismissed. The appeal
shall be heard by a Panel of the Business Conduct Committee (“BCC Panel”) whose decision
shall be final. The appellant shall be entitled to be represented by counsel, appear personally
before the BCC Panel and present evidence that he may have in support of his appeal. The
BCC Panel shall not set aside, modify or amend the appealed decision unless it determines,
by a majority vote, that the decision was:
a. Arbitrary, capricious, or an abuse of the Exchange staff’s discretion;
b. In excess of the Exchange staff’s authority or jurisdiction; or
c. Based on a clearly erroneous application of Exchange rules.
Notwithstanding the provisions of Sections 110.C.2 and 110.C.3 above, the Market Regulation
Department, may, at any time, refer matters that it deems egregious to the Probable Cause
Committee.
© Copyright 2009 New York Mercantile Exchange, Inc. All rights reserved.
Page 10 of 10
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